There are undeniable differences between men and women. This subject, however, should be considered with care. We cannot allow stereotypes to come in a way. We have to study real research and evidence. These will reveal whether there are any discrepancies between the two genders concerning the trading world.
Men versus women
Who dominates the markets?
Research shows that there are more men than women trading. According to CitiFX, there were 80% of male traders in 2014. And though in Europe this number falls to 60%, male predominance is still significant. It is enough that you check trading chat forums and you will see that most participants are men.
Trading in the United States market and gender
In 2001, an academic study was conducted. It was based on a 6-year period and more than 35,000 brokerage services. What was found then? Men opened 45% more positions than women and their net profits were smaller by almost 1% per year. This gap was even bigger when comparing single men with single women and was equal to 1.44% per year. But the final returns were similar between both genders. We can assume that men were overconfident and therefore entered more trades. At the same time, they performed better than women and in the end, those effects mutually offset each other.
The masculine and feminine approach to trading
Studies prove some differences in the masculine and feminine approach to trading. Generally, the best and worst performances were gained by men. This implies that men trade in a more perilous way than women.
Women are more cautious, they consider risk and open fewer trades. This helps to keep the costs down regarding the brokerage fees.
Men are more confident but this often leads to entering trades that do not end well.
Some think women are more likely to be driven by hormones but according to research, this is not true. In fact, men are the ones that have problems with dealing with loses and admitting they were wrong. All this results in women coping better in crisis situations.
Men tend to break trading rules more often than women.
Some studies reveal that women were more successful in opening short positions.
Men are different from women. And they trade in a different way. Confidence is an important factor although you should also be realistic to become a successful trader. No matter the gender, you should be prepared to lose sometimes and invent a strategy that will help you to recover from the failure.
It is also crucial to managing your emotions. Once you have built a trading system and developed some necessary skills, you should be faithful to them. Do not succumb to emotions. Be disciplined.
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Wish you success!